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Well-Planned Vs. Well-Thought-Out? Inquiring Skeptics Want to Know

By® Staff

Originally Posted

HP and Compaq have finally thrown off the annoying Walter Hewlett lawsuit -- after spending more than $100 million on the proxy battle -- and consummated the largest merger in IT history, creating the world's second-largest computer company after IBM.

The companies brag about spending more than a million hours in preparing for the merger, looking at governance, product planning, and many, many plans for reducing duplication and saving costs.

It probably was time well spent, because the incredible amount of detail was required to win the endorsement of the influential research firm, Institutional Shareholder Services, which analysts have called "a critical step in winning major shareholder support."

"The IT industry will never return to the days of 20 and 30 and 40 percent [annual] growth," Carly Fiorina, Chairman and CEO of the new HP, said. She believes that further industry consolidation is inevitable, and that the market will be dominated by a few large, full-service computer companies. She wanted to make sure HP was one of those companies.

Although the two consumer giants originally had planned to combine product lines, second thoughts about losing precious shelf space overruled. Maintaining both brands is not expected to interfere with merger savings of more than $2.5 billion in costs. The companies plan to lay off about 15,000 workers in the next six to nine months.

Twelve hundred workers worked 1.3 million hours planning the merger.

"Yeah," said one of the skeptical Computer Guys on NPR's Public Interest. "And not a minute spent thinking."

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